When Louise Precht's grandson Greg called last year to tell her he was locked up in a Canadian jail and needed $5,000 to get out, the 82-year-old Swansea woman didn't hesitate.

After all, Precht's grandson had been through enough recently. Seriously injured in Iraq, the Purple Heart recipient had been released from Walter Reed Army Medical Center in Washington and returned to active duty.

Precht happily paid to get him out of a jam involving a traffic accident in another country, wiring $5,000 via MoneyGram. He called back. Authorities in Ontario needed another $5,000. Only then did Precht suspect the man wasn't her grandson. "I said, 'Greg, what was your grandfather's first name?'"

The man said he didn't have time. Other inmates needed the phone. Just send the money quickly, he pleaded. Precht asked again and the man hung up.

Precht told her story Tuesday at the Washington headquarters of the Federal Trade Commission, which announced an $18 million legal settlement with Minneapolis-based MoneyGram International, the nation's second-largest money-transfer service after Western Union.

The impostor who cheated Precht, like scores of other fraudsters based in Canada, insisted she send money via wire transfer. Con artists prefer that method because they can pick up the money immediately and the payments are often untraceable. Unlike with credit cards, consumers defrauded via wire transfer have no charge-back rights. Precht didn't send money the second time the scammer called.

The FTC says that, last year, more than 14,000 consumers complained to the commission about being cheated by scams involving wire transfers at companies such as MoneyGram.

Consumers lost $140 million "through a variety of money transfer scams — including false promises about sweepstakes or lottery winnings, guaranteed loans regardless of credit history, jobs as 'mystery shoppers,' and even fake cashier's checks," said David Vladeck, director of the FTC Bureau of Consumer Protection, at the press conference.

"For consumers scammed by crooks working out of Canada, nearly two-thirds said that they paid using money transfers," he said.

In the last three years, Vladeck said, 80 percent of the money MoneyGram moved from the United States to Canada was fraud-related. He said the company turned a blind eye to the scammers using its service.

The FTC said that from 2004 to 2008, MoneyGram received more than 41,000 fraud complaints from U.S. consumers. The company's own fraud department warned that something was amiss, as did law-enforcement agencies, Vladeck said.

"These danger signals were loud and clear alarms," Vladeck said. "Nonetheless, MoneyGram took no action, other than to profit from these ongoing scams."

According to the FTC, at least 65 of MoneyGram's Canadian agents have been charged or are being investigated for colluding in fraud schemes.

In a prepared statement, MoneyGram chief executive Pamela Patsley denied the company hadn't done enough to prevent fraud. She said MoneyGram will redouble their efforts by building "a state-of-the-art consumer anti-fraud program."

The program, which will include background checks on MoneyGram agents and increased monitoring, is mandated by the company's settlement with the FTC. The settlement also orders the company to fire or suspend any agent who has not taken appropriate steps to stop fraudulent transfers.

The company also will pay $18 million, which the FTC will pay to consumers who were defrauded in scams involving MoneyGram transfers.